The White House announced today that President Joe Biden plans to nominate attorney Lisa M. Gomez to be Assistant Secretary of Labor for Employee Benefits.
The Senate-confirmed position oversees the Labor Department’s Employee Benefits Security Administration (EBSA), tasked with regulation and enforcement of private-sector retirement and health plans.
Gomez is a partner with New York City-based law firm Cohen, Weiss and Simon LLP and the Chair of the Firm’s Management Committee.
According to today’s White House statement, Gomez has developed deep technical and practical experience in the multifaceted field of employee benefits law since 1994, representing various Taft-Hartley and multiemployer pension and welfare plans, single-employer plans, jointly administered training program trust funds, a federal employees health benefit (FEHB) plan, supplemental health plans, and VEBAs.
In 2014, she was inducted as a Fellow of The American College of Employee Benefits Counsel, Inc. in recognition of her over 20 years of practice in employee benefits law and her contributions to the field.
EBSA has been led by Acting Assistant Secretary Ali Khawar, a political appointee, since March 25, 2021. He succeeded Acting Assistant Secretary Jeanne Klinefelter Wilson, who replaced Preston Rutledge following his departure at the end of May 2020.
If confirmed by the Senate, Gomez would likely play a key role in determining the regulatory approach for a number of significant high-profile issues making headlines in the past year.
Among them:
• Changing the definition of fiduciary: Back in June, the DOL revealed it is officially looking to change the definition of fiduciary, with the OMB’s Office of Information and Regulatory Affairs listing the DOL and the EBSA as proposing a rule that would “amend the regulatory definition of the term fiduciary set forth at 29 CFR 2510.3-21(c).
It would “more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries within the meaning of section 3(21) of ERISA and section 4975(e)(3) of the Internal Revenue Code.”
In conjunction with this rulemaking, OMB said EBSA will also “evaluate available prohibited transaction class exemptions and consider proposing amendments or new exemptions to ensure consistent protection of employee benefit plan and IRA investors.”
• ESG investing: In March, EBSA announced that it would not enforce recently published final rules on “Financial Factors in Selecting Plan Investments” and “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights,” stating the department intends to revisit the rules based on feedback from a wide variety of stakeholders.
“These rules have created a perception that fiduciaries are at risk if they include any environmental, social and governance factors in the financial evaluation of plan investments, and that they may need to have special justifications for even ordinary exercises of shareholder rights,” Khawar said in a statement at the time. “We intend to conduct significantly more stakeholder outreach to determine how to craft rules that better recognize the important role that environmental, social and governance integration can play in the evaluation and management of plan investments while continuing to uphold fundamental fiduciary obligations.”
• Cybersecurity guidance: Back in April, the DOL announced new guidance for plan sponsors, plan fiduciaries, recordkeepers and plan participants on best practices for maintaining cybersecurity, including tips on how to protect the retirement benefits of America’s workers.
This was the first time the department’s Employee Benefits Security Administration has issued cybersecurity guidance. This guidance is directed at plan sponsors and fiduciaries regulated by the ERISA, and plan participants and beneficiaries.
• Missing participants: In January, the EBSA issued long-awaited guidance on missing retirement plan participants, calling it part of its effort to help plan fiduciaries meet their obligations under ERISA to locate and distribute retirement benefits to missing or non-responsive participants.
EBSA outlined best practices that it has found “effective at minimizing and mitigating the problem of missing or non-responsive participants,” applicable to both defined benefit and defined contribution plans.
• Private equity in DC plans: The department’s June 2020 private equity Information Letter, issued to Groom Law Group on behalf of two of its clients—marked the first time DOL has addressed the use of private equity in defined contribution retirement plans.
The Information Letter confirmed that plan fiduciaries can prudently offer private equity as part of an ERISA plan’s diversified investment option, such as a TDF, within a DC plan. It assists plan fiduciaries by providing detailed guidance on the important considerations for demonstrating a prudent process when considering private equity investments.
EBSA oversees nearly 722,000 retirement plans, 2.5 million health plans, and other benefits plans in the amount of $10.7 trillion dollars.
SEE ALSO:
- Department of Labor to Change Definition of Fiduciary
- DOL Releases Cybersecurity Guidance for 401k Plans
- Preston’s Priorities: An Insider’s View of Retirement Regulation
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
